Poverty is a state where a person is not able to fulfill basic human needs like food, clothing, and shelter due to a lack of financial resources.
Definition According to the World Bank
The World Bank defines poverty as poor access to clean water & sanitation, and inadequate physical security. Almost 8% of the world's population is living below the international poverty line, which is 1.9 US dollars per person per day.
A) Absolute Poverty
It is the calculation of an individual's income against a fixed poverty line.
In India, it is calculated by NITI Aayog (established in 2015).
B) Relative Poverty
It is the comparison between the economic status of two persons, societies, or countries.
It is calculated using the Lorenz Curve and Gini's Coefficient.
1. Dandekar Committee (1971)
One of the earliest post-independence attempts to estimate poverty systematically.
2. Alagh Committee (1979)
Defined the poverty line based on nutritional requirements (calories):
- Rural Areas: 2400 calories / person / day
- Urban Areas: 2100 calories / person / day
3. Lakdawala Committee (1993)
Provided data and methods similar to the Alagh Committee, focusing on calorie intake.
4. Tendulkar Committee (2009)
Shifted the focus from calories to monthly per capita consumption expenditure (MPCE):
- Rural Areas: Rs. 816 / person / month
- Urban Areas: Rs. 1000 / person / month
5. Rangarajan Committee (2012)
Updated the expenditure limits to reflect changing economic conditions:
- Rural Areas: Rs. 972 / person / month
- Urban Areas: Rs. 1407 / person / month
Lorenz Curve
Given by Max O. Lorenz in 1905, this curve graphically represents the distribution of income or wealth.
- The Line of Equality (45-degree line) shows perfectly equal distribution.
- The Lorenz Curve shows actual distribution. The farther it is from the line, the greater the inequality.
1. According to the World Bank, what is the international poverty line per person per day?
2. Which committee (1979) defined poverty based on calorie intake (2400 rural / 2100 urban)?
3. According to the Tendulkar Committee (2009), what was the poverty line for urban areas?
4. The Rangarajan Committee (2012) set the rural poverty line at:
5. Which committee submitted a report in 1993 with data similar to the Alagh Committee?